WUS(SZ:002463) Huachuang Securities·2024-04-23 09:02Investment Rating - The report maintains a "Strong Buy" rating for the company, with a target price of 38.7 yuan [2][3]. Core Views - The company's Q1 2024 revenue reached 2.584 billion yuan, representing a year-over-year increase of 38.34%, while net profit attributable to shareholders was 515 million yuan, up 157% year-over-year [2]. - The AI sector is driving significant growth, with expectations for continued revenue and profit increases as traditional business segments, such as Ethernet switches, undergo upgrades [2][3]. - The company is expected to benefit from strong demand in the AI computing market, particularly in North America, and anticipates further growth in earnings for 2024-2026 [3]. Financial Summary - Q1 2024 operating cash flow reached a historical high of 889.2 million yuan [2]. - Revenue projections for 2024-2026 are 11.497 billion yuan, 13.663 billion yuan, and 15.180 billion yuan, respectively, with corresponding net profits of 2.465 billion yuan, 3.047 billion yuan, and 3.566 billion yuan [4][10]. - The company’s gross margin for Q1 2024 was 33.86%, reflecting a sequential improvement of 1.42 percentage points [2]. - The earnings per share (EPS) forecast for 2024 is 1.29 yuan, with a price-to-earnings (P/E) ratio of 22 [4][10].